Mohandas Pai Warns Trump’s $100K H-1B Fee Hike Will Drive Tech Jobs Offshore

The recent decision by US President Donald Trump to impose a steep $100,000 annual fee on H-1B visa applicants is set to significantly disrupt the tech industry, according to Mohandas Pai, former CFO of Infosys. This proclamation, signed by Trump, aims to curb what he describes as the exploitation of the H-1B visa program, which he claims has been used to replace American workers with lower-paid, lower-skilled foreign labor. However, industry experts, including Pai, argue that this move will dampen fresh visa applications, hinder innovation, and accelerate offshoring in the coming months.

The H-1B visa program was designed to allow US employers to hire highly skilled foreign workers for specialized roles requiring advanced knowledge and qualifications, such as a bachelor’s degree or higher. Contrary to the narrative of “cheap labor,” Pai emphasized that the average salary paid by the top 20 H-1B employers exceeds $100,000 annually. “People pay more than $100,000 as salaries, they’re not cheap. If they pay their staff $100,000, they charge clients $150,000–$160,000. The idea of sending low-skilled people doesn’t hold water,” Pai told PTI.

The new fee, which applies only to fresh H-1B applications, will not affect existing visa holders, limiting its immediate impact. “It has got limited application because it doesn’t apply to all the H-1B visas which are already there. New applications will come down. Nobody’s going to pay $100,000,” Pai stated. An industry expert, speaking anonymously, noted that the fee is excessively high and will affect not only Indian tech companies, which receive 8,000–12,000 approvals annually, but also global tech giants like Amazon, Google, and Microsoft, who rely on H-1B visas to attract top talent.

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Data from the US Citizenship and Immigration Services (USCIS) for fiscal year 2025 (as of June 30, 2025) shows Amazon leading H-1B visa approvals with 10,044, followed by Indian IT firm TCS with 5,505, and other major players like Microsoft (5,189), Meta (5,123), and Google (4,181). Indian companies like Infosys (2,004), LTIMindtree (1,807), and HCL America (1,728) also feature prominently among the top 20 beneficiaries. Pai noted that Indian IT firms have reduced their dependence on H-1B visas over time, with American tech companies now among the top applicants.

The $100,000 fee is likely to discourage companies from pursuing new H-1B applications, pushing them toward offshoring to manage costs. “Companies will work to increase offshoring because it doesn’t make sense—first, you don’t get talent, second, the costs are too high,” Pai predicted. He expects this shift to become evident over the next six months to a year, although the immediate impact over the next three to six months will be minimal.

Critics of the policy argue it could stifle innovation in the US by limiting access to global talent. The H-1B program has an annual cap of 65,000 visas, with an additional 20,000 for professionals holding advanced degrees from US institutions. With the new fee structure, experts warn that the US risks losing its competitive edge in technology and innovation as companies redirect resources to offshore locations.

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